5 factors Bitcoin investors should watch this week

Bitcoin (BTC) started the new week at over $ 36k, after approaching $ 30k again over the weekend. So what’s next?

Cointelegraph took a look at five factors that could affect Bitcoin price action in the coming days.

From weak hands to strong hands

During the correction in May, a process repeated over and over again: new cryptocurrencies were transferred to old investors.

In other words, when BTC was traded close to $ 64,500, the crypto coins were moved again at a much lower price. The people to whom these crypto coins were sent were large investors (whales) who did not make much sales.

This phenomenon was also seen in previous price decreases, but this time the size of the transferred amount has caught the attention of analysts.

Bitcoin Price Index: How much is 1 Bitcoin in TL? (BTC TL)

Analyst PlanB, the creator of the stock flow price model, shared a chart showing the last price of each Bitcoin moved. The trend in April and May was quite clear.

PlanB said, “On the chart, you see the Bitcoin price when it was last moved, with a total of 18.7 million BTC. So what happened in May? Weak hands sold about 1 million BTC at $ 30-35k. These crypto coins were bought in April for 55-60 thousand dollars, that is, they lost 20 thousand dollars. ” he explained.

“The good news is that this 1 million BTC is now in strong hands.”

The most intense fear in the last 12 months

It will not be surprising that the general sentiment in the crypto market has gone to the extreme with this decline.

The Crypto Fear & Ambition Index measured 10/100 on Monday. This score represents the lowest level seen in the past year.

The Crypto Fear & Ambition Index uses a variety of factors to measure overall market sentiment at a given time. The index helps to identify whether the market is overbought or overbought at a certain price level.

You may be interested in: What is the Crypto Fear & Ambition Index?

The index was measured at 68/100 points on May 12, which was in the “ambition” zone, but indicating that there is still time for a possible correction.

The last correction also affected sentiment badly and the index fell to levels not seen since March 2020.

Crypto Fear & Ambition Index as of May 23, 2021. Source: Alternative.me

“The more fear prevails, the better time to buy,” said Steve Courtney, founder and CEO of educational resource Crypto Crew University. he summed up.

Record drop on the monthly chart appeared on the horizon

BTC / USD, which is traded around $ 36,000 as of the time of translation, has lost 20 percent compared to a week ago, although it has gained 1 percent compared to Sunday.

In the current situation, the patience of investors is being tested. Crypto money, after declining to $ 30,000, rose to $ 42,000, but could not hold on to this level.

With the panic created by the mainstream media, Bitcoin fell back to the $ 30,000 band over the weekend. Crypto money has been trading in the $ 30,000 band since then.

The coordinated work of mainstream media can be understood from using the word “gyration” as the word of the day.

Mainstream sources using the word “gyration” in their bitcoin price news. Source: Jesse Powell / Twitter

On the other hand, Charles Edwards, Founder of Capriole Investments, said that the BTC / USD pair is about to close the month with the biggest red candle ever. drew attention.

1-month candlestick chart (Bitstamp) of the BTC / USD pair. Source: TradingView

Stock flow model remains valid

From a long-term perspective, the Bitcoin stock flow model has become the most heart-pumping model.

PlanB, the creator of the model, explained that even the 50 percent correction BTC has experienced since hitting a record has not changed the estimates of the stock flow model.

PlanB said, “Bitcoin price is currently at the lower bound of the S2F model. So am I worried? No, he summed up. The analyst explained that BTC could move about 50 percent in either direction from the record level, and still the model would have acted in line with his expectations.

“Staying at $ 32K for a few months would void the model, but I think BTC will experience a bounce in the next days / weeks.”

Graph of price and stock flow for the BTC / USD pair. Source: S2F Multiple / Twitter

Mining set for a major shake-up

MiningPoolStats data reveals that Bitcoin’s current hash rate is 136.7 EH / s. This number is 30 EH / s lower than its all-time high.

While some other estimates show the hash rate higher by 10 EH / s, it is ultimately not possible to measure the exact number.

Bitcoin’s 7-day average hash rate graph. Source: Blockchain

Bitcoin’s automatic difficulty correction in the next six days can provide incentives to miners and increase hash power.

Due to the rumors that miners have been selling BTC en masse lately, the market may be in great need of this.

Coin Metrics Co-Founder Nic Carter, In Twitter posts “I have confirmed that miners’ sales are one of the most influencing factors for price action at the moment,” he explained.

Check Also

While Paul Tudor Jones criticizes inflation, Bitcoin broke the $ 40,000 resistance!

Bitcoin (BTC) price jumped above $ 40,000 with the positive developments on June 14. BTC/USD …

Leave a Reply

Your email address will not be published. Required fields are marked *